Sensex, Nifty set to post worst 9-month show in 15 years

Even though the markets have made a modest recovery in fiscal 2026-27 (FY27) with the Sensex and the Nifty gaining 1 per cent from their closing 52-week low of 71,947.55 and 22,331.40, respectively on March 30, the first nine months of calendar year 2026 (9MCY26) present a dismal picture.

The BSE Sensex has slipped 15 per cent during 9MCY26 and is set to post its worst performance in the past 15 years. Nifty 50, on the other hand, has lost 13 per cent during the same period. Nifty Smallcap 100 up 8.35 per cent and the Nifty Midcap index down 1.9 per cent has outperformed the benchmark index.

Earlier, in the first nine months of the calendar year 2011, the BSE Sensex and Nifty had plunged 19.8 per cent and 18.9 per cent, respectively.

Foreign portfolio investor (FPI) selling spree in Indian equities amid global geopolitical developments, rising crude oil prices, firming bond yields and an unfavorable rupee-dollar equation dented large-caps, analysts said.

The 9MCY26 saw FPIs pull out Rs 2.50 trillion ($26.75 billion) from the Indian equities, NSDL data shows. The DIIs pumped in Rs 6.28 trillion, suggest stock exchange data.

As long as the war continues, oil prices are likely to remain firm and will keep rate hikes in play, believes U R Bhat, co-founder & director, Alphaniti Fintech.

“This will keep the markets, especially sentiment in the large-caps in check as foreign investors are likely to stay away. Mid-and small-caps, on the other hand, will continue to find favour with the DIIs and retail investors in the months ahead,” he added.

Valuations of many large-cap stocks, cautioned Sanjeev Prasad, managing director & co-head at Kotak Institutional Equities in a September 13 note coauthored with Anindya Bhowmik and Sunita Baldawa, are at reasonable-to-attractive levels but stocks may languish.

“The apathy toward large-cap. Stocks can be seen from three prominent cases—HDFC Bank, ITC and ONGC. We do not find meaningful value in most of the mid-cap stocks under our coverage beyond the financial services space in general and a few isolated names in other sectors,” they wrote.

Among stocks, the top three companies in terms of market capitalisation, Reliance Industries, HDFC Bank and Bharti Airtel saw their stocks drop in the range of 16 per cent to 27 per cent in 9MCY26.

Tata Consultancy Services (TCS), Infosys, Hindustan Unilever, Maruti Suzuki India, ITC, Mahindra & Mahindra and HCL Technologies’ are the other counters that lost between 19 per cent and 37 per cent.

“The near-term FPI outlook is likely to remain data- and macro-sensitive rather than directionally one-way. A combination of easing crude, stabilisation in US yields and a firmer rupee could encourage some re-engagement in secondary equities. Conversely, another rise in US yields or crude could prolong selling,” said Dheeraj Gaur, chief investment strategy officer at Choice Wealth.

Broader markets

Out of 1,345 stocks from the BSE Smallcap index, around half (651 stocks), recorded positive returns in 9MCY26. Of these, 83 companies’ stock price more than doubled, 125 stocks have rallied in the range of 50 per cent to 99 per cent; and 205 stocks have surged 20 per cent to 49 per cent.

Information technology (IT) sector has been the top wealth destructor in 9MCY26 as the Nifty IT index plunged 27 per cent. Fast-moving consumer goods (FMCG) followed, with the Nifty FMCG index slipping 19 per cent, followed by Nifty Oil & Gas and Nifty Financials, which were down 13.6 per cent and 10.7 per cent, respectively.

However, pharmaceuticals, healthcare, metals and capital goods sectors have bucked the trend and outperformed the market, as indices for these sectors rallied in the range of 13 per cent to 19 per cent.